Releasing equity to fund a new home

Posted on 15 February 2011 by Barry Ansell


I'm in the process of divorcing, and it's likely my family will stay in the family home. My question is, could I use the equity in the family home in any way to help me get another (smaller) mortgage?

Barry,

If you own the property jointly this will depend on whether or not your wife will agree to the application. Any additional borrowing will need the signature of both parties. If the property is in your sole name then only your signature will be required.

In theory it is possible to raise the deposit on a second property by borrowing more on your main residence and the more you can borrow the better rate you will be able to achieve on the second mortgage. Lenders will want to be sure you can afford the combined debt and so the overall amount you can borrow will be limited by your income and any credit or maintenance commitments you will have.

I believe you would benefit from speaking to one of our independent mortgage advisers. Please call on 0344 346 3672 and tell the adviser the date of your question, they will be able to look at your situation and take it from there.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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